Security has been stepped up after two separate bomb attacks in the commercial centre in the last week. Photograph: Paul Faith/PA

Police on both sides of the Irish border have foiled a major bomb attack on a target in Belfast, it emerged on Thursday.

Gardaí and the Police Service of Northern Ireland (PSNI) are linking the plot to the arrest of two teenagers at a house just north of the border in south Armagh on Wednesday.

PSNI officers discovered grinders and fertiliser used for making an explosive mix for a car bomb at the property.

The 19 and 18-year olds arrested on 18 December are from Dundalk in the Irish Republic.

Security sources confirmed reports earlier today that a cross border security operaton inolving surveillance for several days led the PSNI to the house in south Armagh.

Inside the house the PSNI found a grinder, which they believe was being used to mix ammonium nitrate fertiliser with sugar to create the bomb.

Armed officers from the Garda Siochana later arrested a 43-year old man at seperate premises in Dundalk on Wednesday night.

He was being held for questioning last night at Drogheda Garda station under section 30 of the Republic's Offences Against the State Act and can be detained without charge for up to three days.

The discovery of the bomb making items has been described as a "very significant" find by security sources in the Republic.

The find comes after two separate dissident republican bomb attacks in Belfast's commercial centre since Friday. The PSNI are still hunting for a suspected fire bomber who suffered burns to his head and upper body on Monday night after the incendiary device he was carrying ignited inside a golf store in Cornmarket.

On Friday a bomb concealed in a hold all partially exploded outside a restaraunt in the Cathedral Quarter of the city.

Security has been stepped up not only in Belfast also along the border in the run up to Christmas as the PSNI and Garda seek to thwart dissident republicans from carrying out a so-called terrorist 'spectacular' during the festive period.

Meanwhile two men arrested earlier this week in connection with an attempt to bomb Belfast's Victoria Square shopping centre and the nearby Musgrave Street PSNI station on November 24 have been released without charge.